After current income and employment status, your credit score is the most important factor that matters to lenders. It is your financial GPA and is based on your payment record over time, your current debt, and how much credit you now have.
The higher your credit score, the less risk the banks consider you to be. Based on your score the bank will decide:
- What interest rate to charge.
- How much to lend you.
- Whether or not to lend you any money at all.
The easiest way to find your credit score is to go to http://www.myfico.com. FICO stands for Fair Isaac and Company. FICO scores range from 300 (worst) to 850 (best). Anything over around 750 is very good and will get you the best rates. The fee is $15.95 but is worth it. If your score is not where it should be, it is better to put off that major purchase until you can improve your score. One website that provides pretty good information on what the different scores mean is: http://www.creditscoring.com/pages/bar.htm